"Brazil's Central Bank announced the purchase of over 17 tonnes of gold in October. Here's the commentary on this from UBS precious metals strategist Ed Tully:

"There may be a flutter of excitement in the market today with news that Brazil's official reserves of gold rose 17.2 tonnes in October, according to IMF statistics. This follows on from the 1.7 tonnes of buying in September and brings total Brazilian gold reserves to 52.52 tonnes. This is a chunky purchase by a central bank, and the gold market will likely sit up and pay attention to today's news, not just because of its size but because this is a central bank that has not been active in the market for some time. Gold struggled in October, and without this official sector buying the move below $1700 would likely have been much more severe than the short lived dips transpired to be. Today's news confirms much of the market chatter at the time that official sector buying was taking place and was one of the key factors that gave prices a reasonable floor last month.

"In fact, several non-Fed/BOE Central Banks increased their gold holdings by over 40 tonnes in October. We know that China, in addition to retaining 100% of the 25 tonnes per month it produces, has been importing bullion hand over fist.

"Gold and silver have been unusually resilient in the face of one of the more overt attempts by the U.S. bullion banks to trigger a COT open interest liquidation sell-off. For those of us who have been trading and researching the metals market for the past 11 years of the bull market, the attempted manipulation has never been more transparent, nor has the ability of the market to withstand this big bank flagrancy. ..."

Egon von Greyerz: “Eric, it's now totally clear to me that the hyperinflation I've been expecting is becoming more persistent and is now engulfing country after country. We are already seeing it in the periphery but it's on its way to engulfing the developed countries of the world….

Trader and financial analyst Gregory Mannarino says, “I think things are looking very bad in the immediate future here. Just this month, the ECB is going to start their Japan style quantitative easing, and that is going to make the U.S. equity market look a little less desirable . . . . I think we are going to see some cash leave the U.S. stock market.” Mannarino goes on to say, “What’s even scarier . . . I think these games we have seen in the dollar could take off parabolic from here, and that is not good. . . . The digits cannot keep up with how fast the Federal Reserve is printing cash out of thin air, right at this moment, to try to combat this deflationary environment. . . . The Federal Reserve did not see this dollar strength coming and how it would affect Wall Street. You can expect the Federal Reserve to be forced to act to punish the dollar at some point, and that is going to hurt the Federal Reserve’s credibility. . . . When a world central bank becomes so desperate that it has to engage in this type of behavior, you know things are very, very bad.”

The U.S. Comex gold futures rebounded over one percent in the past two days to $1,210.10 on Thursday while the Dollar Index also rose 0.85% and the Euro/Dollar plunged 1.25% in the same period. This week, the Euro Stoxx 50 Index jumped 2.42% while the S&P 500 Index was flat and the crude oil futures were down 4.31%. The U.S. ten-year Treasury yield fell 8bp this week to 2.03% on Thursday while the ten-year German Bund yield fell 4bp to 0.323%.

The dragon tail of Marx's end-game of overcapacity and finance capital is about to shred China's fantasy that the state can micro-manage both capitalism and financialization with no contradictions or consequences.

Longtime readers know my one expertise is annoying the entire ideological spectrum in 1,000 words or less. Today is one of those days, so strap on your blood pressure monitor and prepare for full-spectrum annoyance, regardless of your ideological leanings.

Marxism is typically considered discredited outside of a few protected fiefdoms of academia which tend to engage in obscure debates over the labor theory of value and other signifiers of membership in the inner circle of deep Marxist thinkers. ...

Julian Phillips’ latest daily commentary on what is happening in the gold and silver markets and geopolitical factors affecting the prices of gold and silver.

Ahead of London’s opening Asia made the play once again, as the gold price was lifted over $1,214 ahead of London’s opening. When we look back to last week, we saw the gold price unwilling to fall below $1,200 and that was in the absence of Chinese demand. Technical buying in the States was sufficient to hold it there, as the rest of the world was unwilling to push it down, despite the temporary resolution of the Greek bailout crisis. Now that robust demand is back in China and ahead of the Indian budget in the next week we are watching to see if Asia is simply buying at bargain prices or willing to take the gold price higher.

Janet Yellen spoke to Congress again this week. She spoke and spoke. And some people even think they know what she said. Or at least, what she meant to say.

Federal Reserve chairmen traditionally have had a problem clearly communicating. Alan Greenspan was so vague and evasive when he was in charge of the central bank that he should have been charged with obstruction of Congress.

I think the reason for this lack of clarity is simple: The Fed, first and foremost, thinks Congress is a nuisance. Audit the Fed? How dare anyone in Congress even think about doing that! Those morons couldn’t possibly understand what the Fed is doing. ...

Kick-the-can has morphed into a blatant farce. Everywhere in the world central banks and financial officialdom are engaging in desperate, juvenile maneuvers to buy time—–amounting to hardly a few weeks at a go. Never before has the debt-saturated, speculation-ridden global casino rested upon such a precarious foundation.

This week, for instance, Janet Yellen will again waste two days of Congressional hearings in forked-tongue equivocations about an absolutely stupid issue. Namely, the exact date when money market interest rates will be permitted to blip upward from the zero bound by even 25 basis points.

But this “lift-off” drama is flat-out surreal. How could it possibly matter whether ZIRP will have been in place by 80 months or 83 months from its inception point way back in December 2008? There is not a single household or business on main street America which will change its behavior in the slightest during the next year regardless of whether the federal funds rate is 5 bps, 30 bps or 130 bps. ...

Everything made with cheap, unreliable parts/components will break down long before the entire assembly has lost its utility.

In Here's What's Wrong with Corporate America--and the U.S. Economy (December 17, 2014), I concluded that once Corporate America books the sale, they're done with customers. Customer service after the sale (when the upfront profits are booked) is a Kafkaesque tragicomedy of Orwellian narratives: Corporate America publicly worships customer service but delivers none of the real thing. Instead, customers are abandoned in a frustrating Circle of Intermediary Hell, where phone calls are shunted elsewhere and third-party repair crews show up weeks later with the wrong information and leave broken appliances disassembled.

Zerohedge points out that the biggest problem facing the world today is a massive debt-to-GDP ratio that is drowning the economies of most industrialized nations. In fact, 9 countries are in debt to the tune of over 300% of their GDP!

When we put that into household terms it might not seem too alarming. After all, it is common to buy a house and a mortgage that may be 3 times your annual income. The difference here is you typically pay DOWN your mortgage and then you own a substantial capital asset at the end.

Governments are not paying anything down. No principle payments are being made, and no real capital goods exist at the end of this tunnel. No, it is more akin to a credit card balance being the size of your mortgage and you are unable to make more than the minimum payment. ...

Richard Russell: "I scour the newspapers for hints of coming turning points. By my calculations, the markets remain bullish. Massive amounts of money have gone into the US dollar and US Treasury Bonds. New record highs in the Dow attract the retail public.

My Largest Investment

I follow numerous gold items daily. Something is going on with gold. There’s a secret that’s causing every central bank plus Russia and China to be buying gold.

For years I had heard people talking about “the fraud of the Federal Reserve.” But I was busy trying to survive and the dollars I was paid with bought food at the grocery store, so I didn’t give those reports a great deal of attention.

The more I began to study economics, however, the more I understood that this was an essential issue: that if I didn’t understand the foundation, I’d never really understand what was built upon it. So, little by little, I began to pay attention to the question, “Where do dollars come from?”

One of my first discoveries was that almost no one knew anything about this. Shocking though it may seem, they don’t teach this in general economics programs. I’ve had econ grads from well-respected programs come to me and say, “I’m kind of embarrassed to ask, but they never taught it to us in school: Where do dollars come from?”

“No, That Can’t Be True”That’s what I said when I first understood where dollars came from. I said, “No way. That couldn’t be what it is.”

Unfortunately, I was wrong; it really is this way.

The secret to understanding the creation of dollars and of the operation of the Fed lies in two quotes from economist John Kenneth Galbraith:

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.

The process by which banks create money is so simple that the mind is repelled.

I must give the Fed credit for one thing: it has admitted to what it does. A publication called Modern Money Mechanics identifies how the Fed creates dollars. It cloaks that admission in unnecessarily difficult accounting and a convoluted discussion (confirming the first Galbraith quote), but still, it does admit it. ...

The latest figures for net gold exports from Hong Kong into China confirm the latter nation’s strong demand in the run up to the Chinese New Year holiday. The figure for January was 76 tonnes, up from 71 tonnes in December, but it should be realised that this Hong Kong figure relates specifically to Chinese gold imports – not total demand – and then only to a diminishing proportion of the Asian dragon’s total gold imports. If one views known export levels from the U.S. and Switzerland, where official statistics differentiate between gold going to Hong Kong and to mainland China direct, then the percentage moving in via Hong Kong is perhaps only 60% of total Chinese gold imports – still significant, but well below earlier years when Hong Kong will have accounted for perhaps 90% or more of total Chinese gold imports and was thus used as a proxy by Western analysts for the total figure – a pattern which continues today in much mainstream media coverage of Chinese gold import figures. Last year China relaxed import controls to allow far more direct shipments via other ports of entry – notably Shanghai and Beijing which has reduced the amounts routed through Hong Kong.

Kick-the-can has morphed into a blatant farce. Everywhere in the world central banks and financial officialdom are engaging in desperate, juvenile maneuvers to buy time—–amounting to hardly a few weeks at a go. Never before has the debt-saturated, speculation-ridden global casino rested upon such a precarious foundation.

This week, for instance, Janet Yellen will again waste two days of Congressional hearings in forked-tongue equivocations about an absolutely stupid issue. Namely, the exact date when money market interest rates will be permitted to blip upward from the zero bound by even 25 basis points.

But this “lift-off” drama is flat-out surreal. How could it possibly matter whether ZIRP will have been in place by 80 months or 83 months from its inception point way back in December 2008? There is not a single household or business on main street America which will change its behavior in the slightest during the next year regardless of whether the federal funds rate is 5 bps, 30 bps or 130 bps.

On Tuesday the gold price continued to lose ground as money rotates into riskier assets like stocks. In thin volumes on the Comex division of the New York Mercantile Exchange, gold futures for April delivery ended the day at $1,1999.30 an ounce, down slightly from Monday's close after earlier slumping to near its lowest for the year at $1,190.60.

While the gold price struggles equity markets continue to reach new highs. London's FTSE-100 hit an all-time record on Tuesday, while US stock markets did the same after comments from Chair Janet Yellen reassured investors about the timing of rate hikes.

California-based investment site Gold Eagle interviewed noted gold market commentator Nick Barisheff who provided some insights into the disconnect between the economy and capital markets and between paper and hard assets. ...

India’s gold import market is becoming a weekly subject. With developments coming fast out of the world’s top gold-consuming nation.

We got another key decision [last] week. With regulators making one of the biggest moves in months in terms of loosening rules for bringing bullion into the country.

On Wednesday, the Reserve Bank of India said it is lifting a ban on the import of gold coins by banks. Financial institutions will now be free to bring in as much gold as desired, in the form of coins and medallions.

Such shipments had been frozen since last year. And the opening of this import channel could thus provide a major lift to gold buying in the country.

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